Have you experienced this before when you go shopping at a retail store?
“Where can I find pocket squares in this huge place?”
“I can’t find the item I want in stock!”
“I know more about the product than the ignorant sales staff!”
The expectations of today’s customers are rising. Conditioned by excellent online experiences – which provides immediate and personalized service – customers now have similar expectations for in-store retail. Thus, they have a declining tolerance for long lines, slow service, and out-of-stock merchandise.
How can technology help brick and mortar retailers? What can the Internet of Things (IoT) do to produce better awareness of their customers and provide an enhanced customer experience?
About smart retail
What it achieves: Better understand customers and their behavior
How smart retail can help: Optimizing shopping experiences through multiple channels
Why is there a need to think about smart retail: To deepen customer loyalty, brand experience, and business performance
Where does the future of retail lie? ‘Bricks and Clicks’
Frost & Sullivan sees the future of retail integrating both physical (“bricks”) and e-commerce retail (“clicks”) in the form of interactive stores which integrate traits from both. The way forward for brick-and-mortar retailers should be to inject digital elements into their physical environment to draw consumers back to their stores.
But why do retailers need to move to smart retail? Because the consumers of tomorrow will be different from the consumers of today. Mobility and the web are changing the way these tech-savvy consumers buy, by incorporating digital transactions into their shopping experience.
Frost & Sullivan views this changing retail model – evolving from a single channel of interaction (in-store or online), to omni-channel (interacting across multiple channels like ordering online, picking up in-store as well as having items delivered) – as vital to adapt to the changing consumer landscape.
The final frontier in digital and omni-channel retail is bringing the digital experience into physical stores. Achieving a consistent customer experience across multiple channels will ultimately serve to deepen brand loyalty.
Two stages of smart retail – digital awareness to digital immersion
Frost & Sullivan describes the smart retail journey as moving through two stages: digital awareness and digital immersion.
To achieve the first stage of digital awareness, the digitization of the retail store begins by understanding the customer journey during a visit, to generate vital data regarding store design and the product ranges stocked. This data helps retailers better understand their customers, and allows for data-enabled decision-making, helping retailers optimize their layout and design to advise and provide best choices.
But retailers cannot stop at tracking, they need to progress further to digital immersion. This phase aims to provide personalized and contextual advice to provide customers with an interactive experience that will influence their buying behavior.
Through technologies such as Augmented Reality (AR) and social media, avatars or virtual assistants can guide and advise customers based on their profile and preferences to guide them to the perfect product.
Need to create the new retail experience today
The consumer of tomorrow is changing. Brick and mortar retailers cannot be content with the status quo, but need to transform their business to bring digital content into the retail store to create a stronger interactive customer experience across multiple channels of interaction.
To achieve this, decision makers in the retail sector need to change their mindset, and look beyond tackling day-to-day operational issues by fostering a bi-directional engagement with their customers.
Developing smart retail is a journey. Retailers should start by designing a roadmap to formulate a strategy – to move from digital awareness to digital immersion – as they evolve from understanding their customers to better engagement with them, ultimately to enhance customer loyalty and advocacy.
This article has been written by analyst Kenny Yeo from business consulting firm Frost & Sullivan.